Molina Healthcare expects that half of the about 800,000 Medicaid enrollees it gained since the start of the COVID-19 pandemic will lose eligibility due to redeterminations, which began earlier this month.
CEO Joseph Zubretsky said during its Thursday first quarter earnings call that the payer does not expect redeterminations to result in a “significant margin impact” this year, and he raised Molina’s full-year guidance. The payer estimates that a third of the impact of redeterminations will be observed this year, with most of the effects from redeterminations expected to occur in 2024, CFO Mark Keim said on the call.
Executives said that they had little insight into the potential effects of redeterminations so far, after announcing during its fourth quarter and full year earnings results that it expected contract wins in Iowa and Wisconsin to offset Medicaid redetermination losses.
“We know very little more than we did in the fourth quarter,” Zubretsky said on the earnings call. “Only one state has actually started the redetermination process and it's a very small state for us.”
Molina’s Medicaid business represents over 80% of its revenue, with the payer reporting 4.8 million members on its rolls at the end of the first quarter.
Like other health insurers, Molina benefited from increased Medicaid numbers during the COVID-19 pandemic as federal subsidies boosted enrollment numbers. However, states were allowed to restart eligibility checks and cull Medicaid members from their rolls beginning in April. Insurers are bracing for impact, with payers like Centene lowering its 2024 earnings guidance earlier this week due to looming redeterminations.
States are beginning to prepare payers for redeterminations and are releasing lists with information on members at-risk of Medicaid disenrollment. Keim said Molina is working to determine whether disenrolled members can be reverified or placed into a Marketplace product.
“I don’t know that I have great insight on specifically where they’ll go,” Keim said, “Some will get reverified, lose eligibility and moved right into another product. Others may go uninsured for a few months and then eventually wind up in one of those products.”
Despite the uncertainty, Molina increased its 2023 earnings guidance. The company reported a profit of $321 million on $8.1 billion in revenue in the first quarter and emphasized recent contract wins in Texas and Indiana.